Iterative Refinement

[LittleMac]

Got short SNDA today at 28.72. According to my daily we had a clear FTT and break of the blue up channel. On my 30 it is confirmed by the Guassians. I'm still a little edgy with my holds because I have a day trader mentality. Funny thing is even though the setup looks great for the next few days on my daily (MACD Stochastics, channels, guassians) ...every little tick against me still bothers me. I really need to work on this.

One question I have is with regard to my channels. Are they correct on the daily and 30 and also the two FTTs I have labeled on the 30, are they both correct? and if not which one is the right one?

Comments appreciated.

 

[LittleMac]

My 30 SNDA chart....

 

[LostTrader]

Quote from Pr0crast:
Yeah. Note to self: don't bother on day before FOMC.

My note to self is rather: pre-FOMC typically VERY low range/volume - dangerous for beginner trading but good monitoring practice as long as I don't let it shake my confidence.

I consider it very lucky that when Vol dried up I decided to read forums & saw Spyder's comment about being in the chatroom - that made yesterday afternoon very productive for me.

Even though I believe that Spyder is operating at a level deeper than the forest canopy, it helped a lot -- I have been struggling with not recognizing change quickly enough.

 

[Spydertrader]

I thought someone requested an Economic Data Announcement Calender Link, but could not locate the request. Anyhow, one can locate such information, on a world wide basis, by clicking this link.

- Spydertrader

 

[FerdinandAlx]

Chart for January 30 2008 (FOMC day)

 

[LostTrader]

Spyder, if you don't mind, what bracket limits did you use today? (assuming that you did bracket the announcement)

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1772221>

In general, I tend to think 2pts outside the horizontal lines. Today really looked like a one-sided lateral... the top side kept moving! One could assume the high, though I do so dislike assumptions! LOL

Thanks!

 

[Spydertrader]

Quote from LostTrader:

what bracket limits did you use today?

I used 57 to the low side and 61 to the high side. If you note the Price movement just before the announcement - both on the ES and on the YM - you should see a slight up channel in the making. Did the market know in advance?

In addition, note the Price Bars (ES this time) when the market turned (both during the initial retrace, and then again on the reversal). Afterwards, review the YM during the same period.

- Spydertrader

 

[LostTrader]

Quote from Spydertrader:
I used 57 to the low side and 61 to the high side. If you note the Price movement just before the announcement - both on the ES and on the YM - you should see a slight up channel in the making. Did the market know in advance?

Wow. That's tight... On my little snippet above the last DT high you can see (short top orange horz line) was at 1362, and the long low orange horz was just above 1357. The gray line is the daily Pivot @1360.16

Do you normally only bracket the last 3-4 bars before 2PM?

Yes, I had already drawn the up channel, nice clear rising volume too. tho I would not have trusted it to be accurate... Last Sept, my bracket was ~1pt outside the lines & I got whip-sawed badly. At the time, I think you'd mentioned using a bracket ~2 pts outside the lines, which avoided the whip-saw.

So, if you don't mind, how do you decide?
What criteria do you use as input?

Quote from Spydertrader:
In addition, note the Price Bars (ES this time) when the market turned (both during the initial retrace, and then again on the reversal). Afterwards, review the YM during the same period.

Do you mean the retrace & reversal after the announcement at 14:25-35 & 15:00 ? I will review - I save all my charts in a word file...

Thanks!!

 

[Spydertrader]

Quote from LostTrader:

Do you normally only bracket the last 3-4 bars before 2PM?

It depends on the Price action leading up to the announcement.

Quote from LostTrader:

So, if you don't mind, how do you decide?
What criteria do you use as input?

A day which had a more 'flat' approach to the announcement time sees me place 'wider' brackets. Whereas, a day wich appears more 'trending' in nature has me place 'tighter' brackets. 'Flatter' or 'lacking trend' (to me) requires a bit of room to manuever in order to avoid the whipsaw which might materialize.

Quote from LostTrader:

Do you mean the retrace & reversal after the announcement at 14:25-35 & 15:00 ?

Yes.

- Spydertrader

 

[LostTrader]

Quote from Spydertrader:
In addition, note the Price Bars (ES this time) when the market turned (both during the initial retrace, and then again on the reversal). Afterwards, review the YM during the same period.

ES 14:25-14:35:
When the retrace broke the grey tape, there was a nice clear R2R gaussian. The YM also had the R2R tho by that time, price was pretty far down the retrace. Waiting for confirmation probably would get me burned.

Then it bothered me, at the time, that during the next leg up, volume never seemed to come back "high enough" to justify the wider blue up channel and distance of the up move. I didn't really think reversal until the YM B2B (and yes, I know - there is no grey tape on that leg - it would probably show an FTT - shame on me).

ES 15:05-15:15
The end of the last leg up was a clear FTT (Alexander Elder calls these bars Kangaroo tails ), volume clearly wanted to be elsewhere, and it was followed by another R2R. Ditto on the YM, tho not so lonely a tail. I did consider the 15:15 bar is be increasing red, and I know drew the tiny Gaussian before the bar was complete. Much clearer on the YM, which helped me believe until the bigger Vol increase showed up...

Surprisingly, I saw this real-time, though a few points off the optimum. In truth, I was most surprised that the final down channel gave it all back and more - I did not expect the fall to go that far. (Don't the market makers have confidence in the Feds? )

ES 15:45
I had more trouble at the 15:45 bar with just ES - I thought it was a reversal and might have given a few back here, were I actually trading. The YM was an easier read during this period and it only signaled a retrace, not a reversal.

BTW, to better see movement intrabar, I did have a tiny 1min ES window open, just so I could see the Vol & PRV distribution. I do not know if that helped me see clearer (and trust what I saw on 5min) or helped me wander down the retrace at 15:45... But it did seem to help me stay relaxed... So I don't know if it is good or bad - more analysis is required!

Now, I am curious - was that what you wanted me to see? or was there something else?

Thank you!